Hub carriers tend to charge higher fares to their passengers at their hubs. The additional charge is called the hub premium. Different studies have discussed the possible causes of the hub premium. Using the fare data at Hong Kong International Airport, this paper aims at empirically examining the factors affecting the hub premium for both economy and business class markets. The random effect models are employed in the analysis. Consistent with the theoretical results in the literature, airport market concentration, market power, flight frequency and distance are identified as significant factors that affect the hub premium in Hong Kong. In addition, this paper further investigates the impact of strategic alliance and the acquisition of Dragonair by Cathay Pacific on the hub premium.
|Number of pages||5|
|Journal||Journal of Air Transport Management|
|Early online date||13 Jul 2017|
|Publication status||Published - Sep 2017|
|Event||The 19th Air Transport Research Society (ATRS) World Conference - National University of Singapore, Singapore, Singapore|
Duration: 2 Jul 2015 → 5 Jul 2015